Tax Avoidance and General Anti Avoidance Rule (GAAR) in the UK

ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
In the aspect of companies, this is important to pay taxation on time and as accordance of
net income. In the recent time period, it has been seen that companies are ignoring to pay actual
amount of tax (Rossi, Lipsey and Henry, 2018). The project report covers about tax avoidance in
the context of industries of United Kingdom. As well as about importance of general anti
avoidance rule (GAAR) in order to overcome from the issues which arises lower tax payment to
country. Further, part of report consists about Base Erosion Profit Shifting and impact of global
governance communities on it.
MAIN BODY
Meaning of tax avoidance :
Taxes are involuntary fees levied on individual as well as corporations and it is enforced through
government entity of every nation (Hashimzade and Epifantseva, 2017). In simple term, tax is
amount of money paid by individual to government so that it will use for public services. There
are several type of taxes such as income tax, corporate tax, sales, property, tariff and estate tax.
Explanation of these are as follows :- Income tax – It is amount deducted by government from
individual earning filed to the federal government.
Corporate tax – It is some percent of corporate profit which government of every nation take as
tax for funding federal programs.
Sales tax – This type of tax charge on definite products and services.
Property tax – This tax based on the value of land as well as property assets.
Tariff – It is the tax rate which impose on imported goods with the aim of strengthening internal
businesses.
Estate tax – It is rate which applied to the fair market value of property at duration of death.
There are several type of taxes which individual have to pay at different level. But some
people use legal methods to modify there financial situation for lowering the amount of income
tax owned. Such practices are known as tax avoidance as well it is accomplished by claiming
permissible deduction and credits. In addition to this tax avoidance is different from tax evasion
because it is an illegal activity in that individual or entity deliberately avoids paying actual tax
liability. In simple term, within tax evasion person under report their income with the motive to